Staff Report Item 13
Staff Report Item 13
TO: East Bay Community Energy Board of Directors
FROM: Marie Fontenot, Vice President of Power Resources SUBJECT: Broad Reach Power Noosa and Broad Reach Power Cascade Contract Approvals (Action)
DATE: October 19, 2022
__________________________________________________________________ Recommendation
Adopt three Resolutions authorizing the Chief Executive Officer to execute Agreements for two projects awarded short listing through the 2022 Long-Term Resources request for offers (RFO): Noosa Energy Storage LLC (Broad Reach Power) and Cascade Energy Storage LLC (Broad Reach Power). The two battery storage projects listed below are expected to be operational starting in 2024:
a. Cascade: 10-year, 5 MW RA-only from battery storage project in San Joaquin County. June 2024 online date. Developed by Broad Reach Power. b. Noosa: 10-year, 30 mega-watts (MW) Resource Adequacy (RA) from battery storage project in San Joaquin County. June 2024 online date. Developed by Broad Reach Power.
Background and Discussion
The 2022 Long-Term Resource Request for Offers (RFO) is EBCE’s third long-term contract solicitation. The RFO that was launched in November 2020. The RFO sought several hundred megawatts (MW) of contracts with renewable energy and battery storage projects with a preference for projects located in California, and more preferentially, those located in Alameda County. EBCE’s objective was to drive investments in new renewable and energy storage projects in Alameda County and California, while securing affordable resources to manage future power price risk.
EBCE received a very healthy response to its RFO both in volume and quality of projects and proposals. EBCE administered the RFO and completed robust analytics using internal tools and the cQuant valuation platform to calculate the net present Staff Report Item 13
value of proposed projects and determine the optimal portfolio to meet its objectives. EBCE intends to bring additional contracts from this RFO to the Board for approval in the coming months. All of these contracts will be utilized to hedge EBCE against price fluctuation in the CAISO energy markets and they will also contribute to procurement mandates issued by the California Public Utilities Commission (CPUC). The 2021-2023 Electric Reliability Requirements procurement mandate identified volumes of RA capacity each CPUC-jurisdictional load serving entity must procure and have online in the years 2021, 2022 and 2023.1 The second mandate requires additional volumes of RA come online in years 2023, 2024, 2025, and 2026. That mandate is the “Decision Requirement Procurement to Address Mid-Term Reliability 2023-2026”.2
The Broad Reach Power Cascade contract is for RA from a 10 MW/40 MWh battery storage project. The contracted project, Cascade, is located in San Joaquin County.
The contract is for 10-years with an expected commercial operation date of June 1, 2024. Broad Reach Power is an experienced developer having 17 battery storage projects in operation in Texas with an additional 800 MW in development in Texas.
The Cascade battery storage project will be Broad Reach’s second project to achieve commercial operation in California. The contracting entity is Cascade Energy Stroage LLC.
The Broad Reach Power Noosa contract is for RA from a 60 MW/240 MWh battery storage project. The contracted project, Noosa, is located within Stockton in San Joaquin County. The contract is for 10-years with an expected commercial operation date of June 1, 2024.
Attachments
A. Resolution Authorizing the CEO to Negotiate and Execute a Ten Year Resource Adequacy Agreement with Cascade Energy Storage LLC
B. Resolution Authorizing the CEO to Negotiate and Execute a Ten Year Resource Adequacy Agreement with Noosa Energy Storage TBD
C. PowerPoint Presentation
1 https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M319/K825/319825388.PDF 2 https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M389/K603/389603637.PDF Attachment Staff Report Item 13A
RESOLUTION NO. R-2022-XX
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE EAST BAY COMMUNITY ENERGY AUTHORITY AUTHROIZING THE CEO TO
NEGOTIATE AND EXECUTE A TEN YEAR RESOURCE ADEQUACY AGREEMENT WITH
CASCADE ENERGY STORAGE LLC
WHEREAS, The East Bay Community Energy Authority (“EBCE”) was formed as a community choice aggregation agency (“CCA”) on December 1, 2016, Under the Joint Exercise of Power Act, California Government Code sections 6500 et seq., among the County of Alameda, and the Cities of Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Piedmont, Oakland, San Leandro, and Union City to study, promote, develop, conduct, operate, and manage energy-related climate change programs in all of the member jurisdictions. The cities of Newark and Pleasanton, located in Alameda County, along with the City of Tracy, located in San Joaquin County, were added as members of EBCE and parties to the JPA in March of 2020.
WHEREAS, EBCE issued the 2022 Long-Term Resources request for offers (RFO) in February, 2022; and
WHEREAS, Cascade Energy Storage LLC, proposed a 5 MW of Resource Adequacy (RA) from a 10 MW/40 MWh battery energy storage project in San Joaquin County, developed by Broad Reach Power; and
WHEREAS, the project is expected to be operational by June 1, 2024 and will deliver RA for a term of ten years.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE EAST BAY COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The CEO is hereby authorized to negotiate and execute a ten-year RA agreement with Cascade Energy Storage LLC for a 5 MW RA-only battery energy storage project in San Joaquin County. The final agreement shall include the key terms outlined in the staff report associated with this Resolution.
Attachment Staff Report Item 13A
ADOPTED AND APPROVED this 19th day of October, 2022.
Dianne Martinez, Chair
ATTEST:
Adrian Bankhead, Clerk of the Board
Attachment Staff Report Item 13B
RESOLUTION NO. R-2022-XX
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE EAST BAY COMMUNITY ENERGY AUTHORITY AUTHORIZING THE CEO TO
NEGOTIATE AND EXECUTE A RESOURCE ADEQUACY AGREEMENT WITH NOOSA
ENERGY STORAGE LLC
WHEREAS, The East Bay Community Energy Authority (“EBCE”) was formed as a community choice aggregation agency (“CCA”) on December 1, 2016, Under the Joint Exercise of Power Act, California Government Code sections 6500 et seq., among the County of Alameda, and the Cities of Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Piedmont, Oakland, San Leandro, and Union City to study, promote, develop, conduct, operate, and manage energy-related climate change programs in all of the member jurisdictions. The cities of Newark and Pleasanton, located in Alameda County, along with the City of Tracy, located in San Joaquin County, were added as members of EBCE and parties to the JPA in March of 2020.
WHEREAS, EBCE issued the 2022 Long-Term Resources request for offers (RFO) in February 2022; and
WHEREAS, Noosa Energy Storage LLC, proposed a 30 MW of Resource Adequacy (RA) from a 60 MW/240 MWh battery energy storage project in Stockton in San Joaquin County, developed by Broad Reach Power; and
WHEREAS, the project is expected to be operational by June 1, 2024 and will deliver RA for a term of ten years.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE EAST BAY COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The CEO is hereby authorized to negotiate and execute a ten-year RA agreement with Noosa Energy Storage LLC for a 30 MW RA-only battery energy storage project in San Joaquin County. The final agreement shall include the key terms outlined in the staff report associated with this Resolution.
ADOPTED AND APPROVED this 19th day of October, 2022.
Dianne Martinez, Chair
ATTEST:
Attachment Staff Report Item 13B
Adrian Bankhead, Clerk of the Board
2022 Long-Term Resource RFO:
Project Update
PRESENTED BY: Marie Fontenot
DATE: October 19, 2022
Attachment Staff Report Item 13C
• Solicitation Overview
• Participation
• Evaluation Process
• Current RFO Portfolio Characteristics
• Challenges in Marketplace
• Next Steps
• Appendix: Portfolio Summary
2 Agenda
Attachment Staff Report Item 13C
Goals & Objectives
• Secure a portfolio of contracts
to provide EBCE customers
with affordable renewable
and clean energy sources
• Meet IRP Near- and Mid-Term
Resource Adequacy Reliability
Procurement mandates
• Meet a significant percent of
SB350 long-term contracting
requirements, equal to 65% of
RPS obligations
• Create new renewable energy
projects to deliver PCC1 RECs
• Contract low-cost energy
hedges to compliment
existing portfolio
• Partner with SJCE for
efficiency, to minimize
expenses, and lead the
market in contract terms
Actions
• Issued a broad, open,
competitive solicitation to
ensure wide array of
opportunities considered
• Evaluated combinations of
projects to achieve desired
volume targets
• Typically prioritize project risk,
location, workforce
development, economics, and
other characteristics; limited
ability to do so in this RFO due
to limited offers in earlier years
• Encouraged RFO participants
to be creative and provide
proposal variations on
individual projects and include
battery storage
3 Project Characteristics
Facilities:
• Location: Projects may be within or outside
of California. All energy must be deliverable
to CAISO & must provide RA
• Construction Status: Energy and related
products may come from new resources or
add incremental capacity to existing
resources.
Capacity:
• Minimum Contract Capacity: 5 MW
• Maximum Contract Capacity: none
Delivery Date:
• Energy and RPS attribute delivery must be
within calendar years 2023, 2024, 2025, or
2026 with a preference for projects that
begin delivery earlier within this window.
Contract Duration:
• 10-20 year durations
Technology:
• Renewables, Large Hydro
• Storage – short or long duration; any
technology
Solicitation Overview
Attachment Staff Report Item 13C
4 Solicitation Overview – Eligible Products
Product # Product Name Description Example
Product 1 As-Available RPS Product New or incremental capacity to an existing stand-alone PCC1-eligible generating resource solar, wind, geothermal, small
hydro or ocean (thermal,
wave, or current)
Product 2 As-Available RPS plus
Energy Storage
New or incremental capacity to an existing stand-alone PCC1-eligible generating resource with co-located energy storageSame as above plus storage with 2-hr, 4-hr, or 4-hr+
duration capability
Product 3 Firm or Shaped RPS
Product
New PCC1-eligible generating resources; likely
paired with energy storage
Energy delivered during
specific hours
Product 4 High Capacity Factor, No
On-Site Emissions RPS
Energy
New stand-alone PCC1-eligible generating
resource
Geothermal or Biomass
Product 5 Stand-Alone Energy
Storage Toll or RA-Only
offer
Energy storage may offer a full product “tolling”
structure contract or and RA-only offer
Any storage technology with
2-hr, 4-hr, or 4-hr+ duration
capability
Product 6 Zero-Emitting Capacity
Resources
Must be available every day from 5pm to 10pm
(hours ending 17 through 22); must be able to
deliver at least 5 MWh of energy for every 1 MW
of incremental capacity
Emission-free generation
resources, emissions-free
generation paired with
storage, or demand response
Attachment Staff Report Item 13C
5 Participation
• Less robust project offering than 2020 RFO. 44 unique project sites; 185 contract variations (as compared to 70 sites; 400 project variations in 2020 RFO) • All 6 products that were solicited were offered
• Offers included solar, wind, geothermal, pumped hydro, and storage • Projects based in 6 different states (CA, AZ, ID, NM, NV, OR); predominantly CA – *Only 1 projects in EBCE service territory.
Attachment Staff Report Item 13C
Evaluation Process
• Evaluation Rubric scored 3 areas:
– Counterparty Execution, Offer Competitiveness, and Project Development Status – Multiple items under each area
• Two reviewers were assigned to each project.
• Staff reviewed all submitted information and provided scores for all categories except for Term Sheet Markups and NPV.
– Each item has 10 point max. at its own weighting.
– Term Sheet Markups were scored by one assigned reviewer. – NPV scores were directly incorporated into overall project score with a weighting of 45%. • The Net Present Value was calculated based on simulations on 3 different forward curves • For each forward curve we took a weighted average of the P5 (50%), P50 (25%), and P95 (25%) and then took a simple average across the 3 curves
• We normalized this number on a $/MW basis and the projects were then assigned a 0-10 score based on the NPV distribution
• Scoring and rubric were consistent with the selection process for the 2018 California Renewables RFP and 2020 RPS and Storage RFO.
6 Attachment Staff Report Item 13C
Projects Proposed for Execution
7 Seeking approval for two contracts: two RA-only agreements submitted into EBCE and SJCE’s joint 2022 Long-Term Resource RFO
• 10-year, 5 MW RA-only contract for battery storage resource in San Joaquin county (Cascade) with Broad Reach Power. Expected to be operational June, 2024.
• 10-year, 30 MW RA-only contract for battery storage resource in Stockton, San Joaquin county (Noosa) with Broad Reach Power. Expected to be operational June, 2024.
Attachment Staff Report Item 13C
Broad Reach Power – Cascade
Project Details
8 • Selected via the 2022 Joint CAA Long-Term Resource RFO • Contract for 5 MW Resource Adequacy from energy storage project in San Joaquin County
• Total project size is 99 MW
• 10-year contract
• Expected Commercial Operation Date is June 1, 2024
• Project has an executed interconnection agreement and site control. • Committed toward utilizing local and union labor and paying prevailing wages. • The contracting entity under Broad Reach Power is Cascade Energy Storage LLC.
Attachment Staff Report Item 13C
Broad Reach Power - Noosa
Project Details
9 • Selected via the 2022 Joint CAA Long-Term Resource RFO • Contract for 30 MW Resource Adequacy from energy storage project in Stockton, San Joaquin County
• Total project size is 60 MW
• 10-year contract
• Expected Commercial Operation Date is June 1, 2024
• Project has an executed interconnection agreement and site control. • Committed toward utilizing local and union labor and paying prevailing wages. • The contracting entity under Broad Reach Power is Noosa Energy Storage LLC.
Attachment Staff Report Item 13C
Broad Reach Power Company
Overview
10 • Broad Reach Power (BRP) is led by a team who have delivered more than four gigawatts of complex projects and who have a combined experience of more than 80 years. • Founded in 2019, BRP is a utility-scale developer with 350 MW of battery storage projects in operation and over 10 GW in development pipeline.
• BRP is financially backed by prominent investors EnCap Energy Transition Fund, Apollo Global Management, Yorktown Partners, and Mercuria Energy • BRP’s California development team is comprised of three individuals who all live in the state. The transmission team is comprised of well known and highly regarded individuals in California energy.
• BRP has some experience with CCAs; owns and operates at least 1 executed contract with CCAs:
– RA contract with Redwood Coast Energy Authority; energy storage project to COD 5/2023
Attachment Staff Report Item 13C
Portfolio Characteristics
11 Developer Project Location Product Offtake COD Nameplate Sept NQC
Gener-ation
None at this
time
Storage
None at this
time
RA Only
Broad Reach
Power
Noosa Energy
Storage
San Joaquin County,
CA RA only EBCE & SJCE 6/1/2024 30 MW 27
Broad Reach
Power
Cascade Energy
Storage
San Joaquin County,
CA RA only EBCE & SJCE 6/1/2024 5 MW 4.5
Attachment Staff Report Item 13C
Next Steps
• Finalize the two contracts and execute agreements.
• Complete negotiations of projects under consideration. Anticipate presentations to Board through the fall into winter.
• Assess projects as they hit key milestones and mature further. • Update filing to CPUC on status of 2021-2023 and 2023-2026 Electric Reliability Requirements due February 1, 2023.
• CPUC’s 2022 IRP cycle provides formal opportunity for portfolio review and analysis of open position, cost and risk. Further engagement with board and community in spring/summer of 2022 timeframe.
12 Attachment Staff Report Item 13C
Appendix
13 Attachment Staff Report Item 13C
Portfolio Summary
14 Attachment Staff Report Item 13C